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• PARTICIPATION LOAN HEDF buys a portion of the loan. (The <br /> HEDF is not in a subordinate position, no <br /> collateral is required by the HEDF, and the <br /> loan provides a lower interest rate). <br /> • LOAN GUARANTEES HEDF guarantees a portion of the bank loan. <br /> (Personal and real estate guarantees handled <br /> separately). <br /> IV. USE OF PROCEEDS <br /> • Real property acquisition and development. <br /> • Real property rehabilitation(expansion or improvements). <br /> • Machinery and equipment. <br /> • Working capital. <br /> • Business buyouts, only in circumstances in which such assistance is deemed by the <br /> City as essential to retain an existing Hastings company in the area. <br /> V. TERMS AND CONDITIONS <br /> • LOAN SIZE Minimum of $5,000 and maximum not to <br /> exceed 50% of the remaining revolving loan <br /> fund balance; for example, if the remaining <br /> revolving loan fund balance is $50,000, the <br /> maximum loan issuance is$25,000. <br /> • LEVERAGE Minimum 60% of private/public non-HEDF <br /> Maximum 30%public(HEDF) <br /> Minimum 10% equity City loan <br /> • LOAN TERM Personal property term not to exceed life of <br /> equipment(generally 7-10 years). Real estate <br /> property may be amortized up to 30 years. <br /> Balloon payment at 10 years, as appropriate. <br /> • INTEREST RATE Fixed rate not less than 4% below <br /> Minneapolis prime rate. Prime rate per Wall <br /> Street Journal on date of City loan approval <br /> • LOAN FEE Minimum fee of$200, but not to exceed 1% <br /> of the total loan project. Fees are to be <br /> documented and no duplication of fees <br /> between the lending institution and the <br /> HEDF. Loan fee may be incorporated into <br />